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Local school districts laud special session PERS reforms, but Supreme Court decision looms

The state Legislature last week approved its “grand bargain” package, which includes a bill that would infuse $100 million directly into K-12 schools.

There were five bills in the special session package, including House Bill 5101 and Senate Bill 861. HB 5101 will provide $100 million to the Oregon Department of Education for the State School Fund. SB 861 might not go into effect, but it would modify the cost-of-living adjustment on annual benefits for Oregon’s Public Employees Retirement System retirees. PERS is the primary pension for public employees across the state. The long-term savings of the special session’s pension-reform legislation is $4.6 billion.

The Oregon Supreme Court could void SB 861. A coalition of unions could add it to a case against Senate Bill 822, which would also change the PERS cost-of-living adjustment. Lawmakers passed SB 822 in the 2013 regular session.

Schools can access the funds through HB 5101 on July 1, the same date SB 861 would be effective if the high court allows it.

Local schools

Officials at local school districts are enthusiastic about more revenue, although they’re not sure what part of the budget to support. That’s up to the school boards.

State funding constitutes about 70 percent of the Lake Oswego School District’s resources, and so the local impact of the bills would be significant.

The school district stands to gain about $1 million, LOSD Finance Director Stuart Ketzler said. Ketzler said the school board could start making decisions on how to spend the money as the 2014-15 school year approaches.

“I don’t expect that we’ll come back to that in any detail probably until the late-winter time frame because it’s not a time-sensitive matter,” Ketzler said.

Board Chairwoman Patti Zebrowski said she hopes to be able to remove some of the district’s furlough days and to reduce class sizes, but the district still would be underfunded.Patti Zebrowski

“It’s not a windfall,” Zebrowski said. “It’s starting to get funding back to where it was years ago,” before the recession.

She added that the PERS changes would create a long-term revenue boost — how much remains to be seen.

In the West Linn-Wilsonville School District, Superintendent Bill Rhoades anticipated receiving a little more than $1.3 million in additional funding.

“During the last biennium we were able to bring back cut school days and offer a full school year,” Rhoades said. “We were also able to maintain our comprehensive and enriched programs. It is clear that our community considers the restoration of teaching positions and the shrinking of class size a high priority.”

Rob Saxton, Oregon’s deputy superintendent of public instruction, issued a challenge to the state’s education leaders.

“Thanks to their commitment to reinvesting in education, we now have an education budget that I don’t think anyone would have believed possible six months ago,” Saxton said in a prepared statement. “A state schools budget of $6.65 billion truly is an historic reinvestment in our schools. It is now up to us as educational leaders to make the best possible use of these critical funds to improve outcomes for our students.”

In addition to offering revenue to K-12 schools, House Bill 5101 also increases the Community College Support Fund by $15 million to limit tuition and fee increases.

Portland Community College is looking at about $1 million in savings, said Robert Wagner, PCC director of government relations. There’s talk of the Supreme Court deciding on whether to OK the PERS reforms before the end of February, Wagner said.

“I think people are cautiously optimistic,” he said.

Clackamas Community College would get about $1.2 million, said Janet Paulson CCC marketing manager and public information officer.

“It is quite early, and everything is subject to what happens in the courts,” Paulson said.

Senate Bill 861 makes the cost-of-living adjustment amount on PERS users 1.25 percent for annual benefit amounts up to $60,000. That’s less for most amounts, except those for people making $40,000 to $60,000. For amounts higher than $60,000, the COLA drops from 0.25 percent to 0.15 percent. There will be temporary supplemental percentage increases to COLAS from 2014 through 2019.

Difficult decisions

State Sen. Richard Devlin, D-Tualatin, and state Sen. Peter Buckley, D-Ashland, recommended to the governor that he add the supplemental COLA increase into the bill.

“In terms of 822 and 861, most of us who supported those measures or crafted those measures take no satisfaction in them,” said Devlin, whose district includes Lake Oswego, West Linn and portions of Southwest Portland. “We clearly understand that (some of the PERS reforms) will negatively affect people. In fact, most of us have friends, family or close associates who will be impacted by the changes that were made.”Richard Devlin

He added that legislators made the right decisions, even if they were difficult to make. Amid a federal government shutdown, state Rep. Julie Parrish, R-West Linn, whose district touches on the southern portion of Lake Oswego and Rivergrove, said state legislators serve as a model for reaching compromise.

“I’m pleased that our communication didn’t break down and that people stayed at the table even when they wanted to walk away, and we got some good bills passed, and we made some long-term changes,” Parrish said.Julie Parrish

Other bills in the special session included Senate Bill 862, which prevents employer-paid insurance from being added as part of final salary when tabulating PERS retirement benefits. It keeps future legislators from joining PERS and makes a different retirement system for them. The bill also permits wage garnishment if a PERS retiree is convicted of a felony.

There were two other bills in the special session, one prohibiting the enactment of local regulations on agriculture and another increasing the corporate excise tax rate on taxable income from $1 million to $10 million.

Senate Bill 822, from the regular session, could save more than $400 million for all government agencies this biennium and $200 million for school districts and education service districts alone, according to Oregon School Boards Association documents.

Unions decry bills

A coalition of public employee unions — including the largest public sector union in the state, SEIU Local 503 — are taking lawmakers to the highest court in the state, calling SB 822 unconstitutional and a breach of contract. The coalition also could be contesting SB 861, although probably not SB 862, said Greg Hartman, an attorney for the unions.

The “’special’ session bill package is nothing other than a disgrace to our state,” SEIU Local 503 Executive Director Heather Conroy said in a prepared statement. “Pulling the rug out from under low-wage seniors while giving more tax breaks to the wealthy and corporations isn’t the Oregon way.”

The unions have a 60-day window to submit a challenge to SB 861. Hartman said by altering the COLA, the Legislature is breaking a deal it made with unions on a PERS statute that “has remained unchanged since 1973.”

“We say that’s part of the PERS contract, and the Legislature can’t come in and change it,” Hartman said.

Jillian Daley can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it. and 503-636-1281, ext. 109. Follow her on Twitter, @jilliandaley.

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